© Reuters. File photo: The Adani Group logo is seen on the front of its headquarters outside of Ahmedabad, India on January 27, 2023. REUTERS/Amit Dave/File Photo
Lewis Jackson
SYDNEY (Reuters) – An Australian pension fund client of GQG Partners has asked the U.S. boutique investment firm for more information about its nearly $1.9 billion investment in troubled India’s Adani Group.
GQG Partners has purchased $1.87 billion worth of shares in four Adani Group companies, marking its first major investment in the Indian conglomerate.
US companies manage funds on behalf of at least four major Australian pension funds, totaling A$563 billion. GQG’s investment could expose Adani to major investors, including Norwegian sovereign wealth funds, when these funds are selling their shares.
Cbus Super, which manages A$71 billion, has a A$243 million emerging markets mandate with GQG Partners. A spokeswoman told Reuters the fund was working to get a clear picture of its exposure to Adani.
“While the Adani entity was not part of our portfolio, we are currently working with an outside manager who has made recent acquisitions in this space,” they said.
Laird Abernethy, managing director of GQG Partners Australia and New Zealand, said in a statement that the fund manager has reached out to all institutional investors to explain the reasons for the purchase.
AustralianSuper, which is outsourced to GQG Partners, will go public to four Adani Group companies following the transaction, according to sources familiar with the matter.
As of June 2022, the $258 billion fund has no investments in Adani Group companies, according to a review of the latest holding disclosures.
A spokeswoman for A$67 billion Rest Super said the pension fund was aware of the transaction and “has not currently impacted its portfolio”.
Shares of Australian-listed GQG Partners closed down 3% on Friday after news of the investment was made public. The wider stock exchange he rose 0.4%.
Jun Bei Liu, who manages the A$1.2 billion Tribeca Alpha Plus Fund, said: “There is a lot of concern about what the investment means and whether they understand the risks they are taking. There is a high level of skepticism.
New York-based short seller Hindenberg Research accused the Adani Group in a Jan. 24 report, accusing it of blurring the scope of the Adani family’s stakeholdings in the group’s companies, alleging stock manipulation and offshore operations. He mentioned the inappropriate use of tax havens.
The Indian conglomerate, which denies wrongdoing, has since seen more than $130 billion erase the value of seven publicly traded companies.